Governance weaknesses debilitate Congo’s economy - IMF

Brazzaville, Congo (PANA) - An International Monetary Fund (IMF) mission and the authorities in Congo have reached broad understanding on policies that could be supported by the IMF under a financial arrangement to foster sustained and inclusive growth by restoring fiscal sustainability and enhancing governance.

“The programme intends also to contribute to regional efforts to strengthen external stability,” said Mr. Abdoul Aziz Wane who led the IMF mission to Brazzaville from April 3 to April 18, 2018 to discuss the authorities’ economic and financial programme and possible financial support by the Fund.

In a statement issued on Friday, Mr. Wane explained that Congo’s economy is suffering from the effects of low oil prices, unsustainable debt, and significant governance weaknesses, while prolonged recession of the non-oil economy hurts the most vulnerable segments of the population.

“Despite sustained fiscal adjustment since 2015, economic imbalances remain large and debt is unsustainable. The debt overhang and the related accumulation of government arrears undermine investors’ confidence, financial sector stability, and social services. Weaknesses in governance and anti-corruption efforts have exacerbated enforcement gaps and economic vulnerabilities,” he pointed out.

According to the IMF mission, the Congolese authorities will need to take bold and immediate governance reforms to put into effect the government’s proclaimed intention to mark a break with past policies and practices.

In that regard, the mission has welcomed the government’s plan to publish a governance study that will guide future reforms, in the area of governance, transparency and public finances management.

“The mission commended the authorities for their plan to establish an independent anti-corruption body with full investigation powers and an asset declaration system for high-level officials, and reinforce oversight over large investment projects and state-owned enterprises, notably the public oil company,” Mr. Wane said.

In addition, the IMF team welcomed the authorities’ decisions to report fully to Parliament and the population on the management of natural resources and large infrastructure investment projects over the recent past.

“A strong participation of civil society will be critical for the success of the governance reforms,” Mr. Wane observed, stating that his mission welcomed the authorities’ efforts to enhance transparency in the oil sector, with a view to increasing the share of the state in the nation’s natural resources.

In this regard, the first step will be to develop capacity to systematically reconcile all government transactions backed by natural resources. The authorities intend to approach all companies exploiting natural resources with a time-bound request to declare any claims they may have on the government’s share in these resources.

Once compliance with all relevant IMF policies has been established, an arrangement to support Congo’s economic programme would be proposed for the IMF Executive Board's consideration, Mr. Wane said.

According to the statement, the IMF team was received by President Denis Sassou Nguesso and by Prime Minister Clément Mouamba. The mission also met with State Minister of Economy Gilbert Ondongo, Finance Minister Calixte Nganongo and other senior officials.
-0- PANA AR/MA 20April2018

20 Abril 2018 09:38:46




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